December 5

4 Keys to a Compelling Value Proposition by Richard Tyson

Engagement, Key Performance Indicators, Leadership, Operations, Vision


Your company purpose sets forth your WHY, but the articulation of your vision requires more than that… It requires a clear and compelling MISSION, what your enterprise does on a consistent and continuous basis.

Your MISSION should encompass your VALUE PROPOSITION which is the value you promise to deliver to your customers. It is what makes your product or service attractive to your customers. A compelling value proposition meets four criteria:

1. It’s specific: It clearly sets forth specific benefits that a specific target customer will receive. It intensely focuses on understanding the needs of that customer.

World renowned business author, Clayton Christensen has suggested that “many products fail because companies develop them from the wrong perspective.

Companies focus too much on what they want to sell their customers, rather than what those customers really need. What’s missing is empathy: a deep understanding of what problems customers are trying to solve.”

He goes on to set forth what he calls The Job-To-Be-Done Theory, which is:

“When a company understands the jobs that arise in people’s lives, and then develops products and the accompanying experiences required in purchasing and using the product to do the job perfectly, it causes customers to instinctively ‘pull’ the product into their lives whenever the job arises. But when a company simply makes a product that other companies can also make–and is a product that can do lots of jobs but none of them well–it will find that customers are rarely loyal to one product versus another.”

The result of an intense focus on understanding the jobs for which your customers hire your product or service is that you become increasingly capable of responding directly to those needs through your value proposition.

2. It goes to the pain: It demonstrably solves specific customer problems or improves his or her life in significant and specific ways. To zero in on the pain your customers are experiencing, ask the following questions:

  • Is the current solution your target customer is employing too costly? What are the cost dimensions of that current solution? Is it simply the dollar cost? Or is it the complexity of the transaction that’s creating the pain?
  • What is frustrating or annoying about the target customer’s current experience in solving their problem?
  • How would you define the value proposition of the current solution that the target customer is buying? (Yours and/or the competition)
  • What are the main difficulties your target customer has with the current solution and its inherent value proposition?
  • What negative social consequences do your target customers fear, given the current solutions?
  • What risks make your target customer averse to the current or potential solutions?
  • What common mistakes does your target customer make that you might solve?
  • What barriers do you see that prevent your target customer from adopting current or potential solutions?
  • What keeps your target customer worried? What keeps them up at night?With these answers in hand, strive to make customer pains as concrete as possible. The team at recommend that you get deeply granular in this regard. “For example, when a customer says ‘waiting in line was a waste of time,’ ask after how many minutes exactly it began to feel like wasted time. That way you can note (that specifically the pain is) ‘wasting more than X minutes standing in line.’ When you understand how exactly customers measure pain severity, you can design better pain relievers in your value proposition.”3

3. It creates customer gains: Often, strong value propositions deliver specific upside benefits rather than overcoming downside pain. They address the outcomes desired by customers, sometimes even gains they have not articulated or anticipated. They may include such benefits as cost savings, functional utility, enhanced social status, or even just feeling physically or emotionally better. Your challenge is to define the gains your product or service offers–through the eyes and perspective of your target customer, rather than through your own eyes and perspective.

The team suggests that in seeking the gains that customers want, you should consider the following categories:

“Required Gains: These are gains without which a solution wouldn’t work. For example, the most basic expectation that we have from a smartphone is that we can make a call with it.

“Expected Gains: These are relatively basic gains that we expect from a solution, even if it could work without them. For example, since Apple launched the iPhone, we expect phones to be well-designed and look good.

“Desired Gains: These are gains that go beyond what we expect from a solution but would love to have if we could. These are usually gains that customers would come up with if you asked them. For example, we desire smartphones to be seamlessly integrated with our other devices.

“Unexpected Gains: These are gains that go beyond customer expectations and desires. They wouldn’t even come up with them if you asked them. Before Apple brought touch screens and the App Store to the mainstream, nobody thought of them as part of a phone.”

Once again, you should strive to define customer gains as concretely as possible. This often requires deep questioning–of both yourself, and your target customers.

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